UBS analyst, Steven Milunovich, stated in a note to investors recently that it was sort of appropriate for Apple to surprise the market with its largest ever deal, known to Apple history. He noted that he’d like to hear Apple’s reason for the rumored purchase before investors form a strong opinion on the anticipated deal with Beats. Milunovich said that the $3.2-billion rumored price seems reasonable if Beats revenue is about $1.4 billion annually with high margins. Milunovich also feels that Beats Music will complement the somewhat success of iTunes Radio and the headphone designer will be able to strengthen future Apple products in the wearable device market. UBS analyst said that the company made an intelligent move in the past with the Mac and the Beats deal could possible do the same for music lovers.
Apple has not promoted the brand of a company it has acquired, but it does have sub-brands: iPod, iPhone, iPad, Mac. People use the product name knowing Apple makes them. 'Beats by Apple' isn't all that different.
It has been speculated that Jimmy Iovine and co-founder Dr. Dre Young will be joining the Apple Team as part of the so-called “acqui-hire” agreement which is also in the $3.2-billion deal.
Source: UBS via AppleInsider